The Nigerian naira strengthened to N1350 per dollar in the official market, its strongest level since April, according to data from FMDQ.
Market Performance and Drivers
The appreciation, which represents a 2.17% gain from the previous close of N1380, was attributed to increased dollar supply and ongoing reforms by the Central Bank of Nigeria (CBN).
Traders reported that the naira's rally was driven by improved liquidity in the forex market, with the CBN's policies encouraging more inflows from exporters and investors.
Impact on Economy and Businesses
The stronger naira is expected to ease import costs and reduce inflationary pressures, benefiting consumers and businesses that rely on imported goods.
However, some analysts caution that the gains may be temporary if oil prices remain volatile and external reserves continue to decline.
Outlook and Next Steps
The CBN has signaled its commitment to maintaining a market-driven exchange rate, which could lead to further appreciation if supply continues to improve.
Market participants will be watching the upcoming MPC meeting for any policy changes that could affect the currency's trajectory.
